Earlier this summer, CNN and The New York Times each warned that the nonfungible token (NFT) bubble, fueled by buzz over eye-popping valuations for
Earlier this summer, CNN and The New York Times each warned that the nonfungible token (NFT) bubble, fueled by buzz over eye-popping valuations for digital art and interest from collectors, might already be bursting.
As the sixth employee at a social media startup called Wildfire — which was acquired by Google in 2012 — I’m all too familiar with skeptics and precautionary tales when it comes to new and emerging technologies. Based on my experiences across entertainment, licensing and blockchain technology, I contend that if the so-called NFT bubble is bursting, it could be a net positive for the future of the industry. The industry is so nascent, we’re the first batter of the first inning right now.
Related: Beyond the hype: NFTs’ actual value is still to be determined
NFTs: The industry to explore
Public attention is always shifting from one trend to the next, so naturally, the otherworldly surge in popularity of NFTs that we’ve been seeing would eventually taper off. This presents us in the industry with an incredible opportunity to explore the many doors that NFTs will open to creators, IP owners and consumers alike.
For brands looking to grow and reach new audiences, NFTs are emerging as a bonafide marketing channel. Once NFTs gain more mainstream recognition beyond the initial swell, creators will have the ability to reach more and more users. Platforms like Telegram, Twitch and Discord have already demonstrated the many ways to create and nurture a fan base. Just imagine what a robust NFT marketplace will add to this growing movement.
As digital certificates of authenticity, NFTs can function as guardians of intellectual property rights. The NFT space will ultimately look like the music publishing model, where music publishers and songwriters amass catalogs of copyrights that deliver a persistent stream of royalties in perpetuity, driving long-term valuation. The creation of a management platform that allows IP owners to manage NFT transactions (think business intelligence, analytics and CRM capabilities) is on the horizon.
Related: Nonfungible tokens: A new paradigm for intellectual property assets?
NFTs also serve as digital passports, completely revolutionizing the fan experience and reimagining the idea of the fan club for artists, brands and IP owners. As the world fully opens up after the COVID-19 pandemic, fans will use their NFT portfolio to unlock behind-the-scenes offers, VIP experiences and special meet-and-greets. Given that digital assets, like tangible goods, are based on the economic principles of supply and demand, scarcity will enhance value and increase the number of consumers and digital natives who seek to get in at the ground level. Additionally, proximity-based NFTs will drive experiences, both offline and online.
NFTs: Moving forward
The future of NFTs becomes increasingly potent as we in the industry continue to think first and foremost about fans and consumers. We must shift the attention of the media and consumers away from the six and seven-figure primary sales numbers to a focus on creating real value by way of infusing true utility into NFTs. We must focus on creating smart, strategic collections of NFTs (as opposed to one-off drops) that gain enhanced value over time as the utility of the NFTs purchased becomes increasingly evident to fans.
The industry is rapidly evolving from what I consider to be NFT 1.0 — NFTs as digital collectibles — to NFT 2.0 — NFTs as storytelling vehicles. Projects such as Stoner Cats are the tip of the iceberg in terms of leveraging NFTs as access tokens to view exclusive video content. What excites me, even more, is NFTs as storytelling vehicles, where the NFTs are powered by deep gamification strategies and community layers and become critical components of a multi-platform, transmedia storytelling experience.
At Wildfire, we were always aware that a rising tide lifts all boats. We made significant efforts to bolster not just our company but the entire social media marketing category. I feel the same way about the nascent NFT industry. Most importantly, NFT companies must remain steadfastly focused on the fans and consumers so that we avoid becoming an industry that sinks under a perception of misguided cash grabs and short-sightedness.
Related: Navigating the NFT minefield: It should be made easy for first-time buyers
NFTs will become a fan’s persistent passport and gateway to unlocking unique experiences — both online and offline. This will occur as NFT collections become smarter, more strategic, more gamified and deliver meaningful utility that sustains long-term fan engagement.
As the industry matures, people will become more sophisticated in how they think about NFTs and the ultimate value NFTs deliver for fans and IP owners alike. The utility will become increasingly important as fans and consumers seek to better understand the “so what” factor behind NFTs. So what that I own this NFT. . .what can it do for me? What…